Sales of Tata Nano, world’s cheapest car, set to hit six-year lows

Till january, the nano has contributed only 12.7% to tata motors’ overall passenger vehicle sales.

New Delhi | Published: March 5, 2015 3:25:45 am

Sales of Tata Nano — billed to drive the company’s growth in the current decade — are set to plummet to a six-year low in the current financial year.

Sales of the car at 13,333 units till January this fiscal are less than a quarter of wholesale volumes of 53,848 units registered two years back and less than fifth of peak sales of 74,527 units seen in 2011-12.

With Tata Motors averaging monthly sales of little over 1,300 units of the Nano, it is unlikely that the previous fiscal’s volumes of 21,129 units can be met in the remaining two months. Additionally, with Ratan Tata’s dream car failing to cut the ice with customers in India, capacity utilisation in Tata Motors’ Sanand unit has remained sub-par to say the least.

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The company has cumulatively managed to sell 2,63,619 units of the Nano till January 2015 as against annual capacity of 2,50,000 units available at the facility.

To look at the Nano’s success or rather the lack of it from another perspective, Tata Motors had targeted monthly sales of 20,000 units at the time of launch of the car. Yet, calendar year sales in 2013 and 2014 have stood at 18,447 and 18,531 units respectively.

A key reason for this showing has been the Nano’s failure to create a mass market for small cars. Launched in July 2009, Nano sales between 2010-11 and 2012-13 comprised 23-24 per cent of Tata Motors’ passenger vehicle sales. But Nano sales declined sharply after peaking to 74,527 in 2011-12. The numbers came down by more than 70 per cent in two years to 21,129 in 2013-14.

It is now set to touch a new low in the current financial year. Till January this fiscal, Nano pitched in only 12.7 per cent to the firm’s overall passenger vehicles sales – again a new low recorded since launch in 2009-10.

Tata Motors had attempted to reposition the vehicle from a cheap microcar to a ‘smart city car’ with the launch of Nano Twist in January 2014. The company said in an emailed response that since its launch it is seeing “good retail” and “hope(s) this momentum continues”.

“With power-steering, bluetooth stereo and keyless entry, the Nano Twist has appealed to a younger, more affluent customer. The kind of customers we are attracting today are real good buyers which is a very healthy sign – young professionals,” said a spokesperson at Tata Motors.

Statistics available with Tata Motors hint at a shift in customer profile – in the past 5-6 years, the proportion of Nano buyers in the 24 -34 years age bracket has expanded to 40 percent, from the earlier 15 to 18 per cent. The Nano Twist XT is most preferred variant today.

To further court the urban city buyer and strengthen Nano’s positioning as a ‘smart city car’, Tata Motors is developing for launch an automatic transmission variant of the Nano.

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